Nifty - 17 Jun 2014 - Bears get a look in

Bears close Nifty below 8EMA for 2 sessions consecutively. Bulls need to come in. 

In our last post we had mentioned that "Bulls were in charge", but that was about 6 sessions ago and once the Nifty touched 7700 on 11th Jun, the Nifty has seen profit booking and then some more Bearish moves, wherein the Nifty made a low of 7488 yesterday. However, the Bulls have always managed to close the Nifty above the psychological levels of 7500. While our other priorities have kept us away from active trading and blogging, we have been monitoring the moves on the Nifty from the sidelines. If the Bears are not able to sustain lower levels in the coming couple of sessions, then the Bulls will get their chance to make even more all time new highs.

1) The Elder Ray readings : Bull Power reduces from +185 to +50 Bear Power rises from +32 to -11 indicating that the Bears have now regained their lost territory and need to do more to keep it that way. For today, the Bulls need to overcome the levels of 7555 to maintain their upwards momentum whereas the Bears need to breach the levels of 7485 to maintain their downwards momentum. 

2) The stochastics have just moved below the overbought zone and are pointing downwards.

3) The Nifty has closed below its 8EMA(7551) but is above its 13EMA(7499) & 21EMA(7405) and is also above all its key DMAs. 

4) In the above chart, the volumes have decreased with the fall in the Nifty indicating that the fall may get arrested. The MACD is threatening a breakdown with the histogram moving below the zero line. The ADX is suggesting a fall in the Bullish momentum and a rise in the Bearish momentum but is still favoring the Bulls. The Parabolic SAR continues with its Buy signal with the SL now brought up to 7299.

5) Considering the above, our trading plan for the day is as under.

a) Around 7590 we will open fresh short positions with a SL of 7615 and a target of 7490. We will add to these short positions only below 7450.

b) Around 7470 we will open fresh long positions with a SL of 7450 and a target of 7575. We will add to these long positions only above 7615.

Happy Trading !!! 

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